UAE food and beverages company Agthia Group posted a 34.9% plunge in profit to 137.03 million dirhams ($37.3 million) in 2019 from 210.5 million dirhams in 2018.
The company’s preliminary earnings released on Sunday (Feb 9) pointed to the withdrawal of its remaining bakery channel subsidy, de-growth in bottled water in UAE, and bad debt provisioning against longer collection days in international markets, as attributing factors.
The company behind Al Ain Water, Al Bayan, and Grand Mills earned a 2% increase in net revenues to 2.04 billion dirhams.
Its consumer business contribution to the top-line rose to 56% from 54% in 2018 due to geographical expansion and product category diversification, said Agthia.
In its water and beverages segment, Agthia said its international markets and 5-gallon home and office delivery business in the UAE largely offset the slip in its bottled water category in its home market.
“In the UAE, changing consumer habits came in favour of the recorded growth in shipped volumes of 5-gallons yet added pressure on bottled water category which in turn witnessed a decline in both volume and value,” it said.
The company said its food segment, comprising tomato paste and frozen vegetables, dairy, bakery and trading items, showed double digit growth driven by Egypt, and trading items.
In the agri-business segment, Agthia said flour outperformed but animal feed sales fell short on lower grain sales and lower demand from small-sized farms.
Agthia’s total assets reached 3.1 billion dirhams, a slight growth of 5.34% from 2.96 billion dirhams in 2018.
Agthia Group is 51% owned by the government of Abu Dhabi’s industrial investment holding company Senaat.
($1 = 3.6725 Emirati dirhams)
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